Flood insurance must work

Published: Tuesday, July 20, 2010 at 9:41 a.m.

Last Modified: Tuesday, July 20, 2010 at 9:41 a.m.

The U.S. House of Representatives has approved a measure that would extend the National Flood Insurance Program for five years.

The bill, which now goes to the U.S. Senate for its approval, would phase out some insurance coverage and allow the government to charge more for some other policies.

It would also raise annual deductibles, meaning that higher amounts of damage would have to be covered by home- and business owners out of their own pockets.

There need not be a rush to judgment about the current proposal, which aims to make the program more solvent. However, one thing is certain: The system needs to be fixed so local people are not held captive every few months by political whims in Washington, D.C.

After paying out huge claims after hurricanes Katrina and Rita, the NFIP found itself more than $18 billion in debt.

It needs to have more money in the form of federal subsidies, increased premiums, increased deductibles or some combination of the three.

And it needs to get on solid footing soon.

It is currently operating on a temporary extension that will keep it going through September. But there is no guarantee that it will be renewed right away or at all.

Three times already this year, the flood-insurance program has lapsed, each time throwing potential real-estate transactions into uncertainty.

No one can get a mortgage for a home or business purchase within flood zones — such as those that encompass much of our region — without a flood-insurance policy in place.

So each time the program lapses, people and businesses are unable to conduct real-estate transactions.

In addition, the existing policies are rendered temporarily useless.

So when the end of September comes, if there is no renewal — long-term or short-term — to the program, everyone who has a flood-insurance policy will stand the chance of having no coverage in the event of a flood.

Sure, Congress can go back and issue coverage retroactively to make sure the lapses are not catastrophic for flood victims.

But there is no assurance that will happen.

No one should have to wonder multiple times each year whether a home or business has the coverage he or she has purchased with the help of the federal government.

The fix before Congress has some troubling aspects to it. It would cut out subsidies for some vacation homes and other properties. It deserves more debate and scrutiny before it can be passed into law. But clearly something must be done. Let’s hope our national leaders are listening.

Editorials represent the opinions of the newspaper, not of any individual.

<p>The U.S. House of Representatives has approved a measure that would extend the National Flood Insurance Program for five years.</p><p>The bill, which now goes to the U.S. Senate for its approval, would phase out some insurance coverage and allow the government to charge more for some other policies.</p><p>It would also raise annual deductibles, meaning that higher amounts of damage would have to be covered by home- and business owners out of their own pockets.</p><p>There need not be a rush to judgment about the current proposal, which aims to make the program more solvent. However, one thing is certain: The system needs to be fixed so local people are not held captive every few months by political whims in Washington, D.C.</p><p>After paying out huge claims after hurricanes Katrina and Rita, the NFIP found itself more than $18 billion in debt.</p><p>It needs to have more money in the form of federal subsidies, increased premiums, increased deductibles or some combination of the three.</p><p>And it needs to get on solid footing soon.</p><p>It is currently operating on a temporary extension that will keep it going through September. But there is no guarantee that it will be renewed right away or at all.</p><p>Three times already this year, the flood-insurance program has lapsed, each time throwing potential real-estate transactions into uncertainty.</p><p>No one can get a mortgage for a home or business purchase within flood zones — such as those that encompass much of our region — without a flood-insurance policy in place.</p><p>So each time the program lapses, people and businesses are unable to conduct real-estate transactions.</p><p>In addition, the existing policies are rendered temporarily useless.</p><p>So when the end of September comes, if there is no renewal — long-term or short-term — to the program, everyone who has a flood-insurance policy will stand the chance of having no coverage in the event of a flood.</p><p>Sure, Congress can go back and issue coverage retroactively to make sure the lapses are not catastrophic for flood victims.</p><p>But there is no assurance that will happen.</p><p>No one should have to wonder multiple times each year whether a home or business has the coverage he or she has purchased with the help of the federal government.</p><p>The fix before Congress has some troubling aspects to it. It would cut out subsidies for some vacation homes and other properties. It deserves more debate and scrutiny before it can be passed into law. But clearly something must be done. Let's hope our national leaders are listening.</p><p>Editorials represent the opinions of the newspaper, not of any individual.</p>